CFA Credentials Complement the MBA, Do Not Substitute for It
An applied finance and economics professor at Johns Hopkins University who “guarantees” the undergrads who take his class their top choice jobs on Wall Street when they graduate advises those students to skip the MBA and obtain their chartered financial analyst (CFA) credentials instead. At Clear Admit, we’re crying foul.
Hopkins Professor James Hanke, in an interview with Business Insider, said he doesn’t think that MBA programs are worthwhile. CFA credentials, he argued, are “more rigorous” and “much better.”
Hanke has been trading currencies and commodities for more than 50 years and runs his own wealth-management firm. Still, we think his comparison—of a specialized technical certification with a broader education in all things management—is absurd.
“The CFA is basically a test of finance and accounting with a focus on how finance and accounting is used in the banking industry,” Clear Admit Co-Founder Eliot Ingram says. “Meaning, the CFA is really only relevant for people seeking certain jobs in the finance industry.” The MBA, in contrast, offers a broader business education as well as a valuable brand and network.
Make no mistake: the CFA has value. A lot of MBAs in finance take the exam because it is a good credential to have in finance, Ingram notes. “It does demonstrate a level of mastery of the material—much like passing the bar exam after law school,” he says.
Having said that, prospective applicants to business schools should understand how admissions offices at leading MBA programs view CFA and certified public accountant (CPA) credentials. These credentials are not considered “academic” measures like an applicant’s GMAT or GPA, says Ingram. “In reality, the completion of the CFA/CPA exams is more of a professional credential and is not a substitute for grades and standardized testing,” he says.
While we are happy for Hanke’s students who have landed entry-level analyst positions on Wall Street, we stand by our belief in the intrinsic value of the MBA and caution those who would heed Hanke’s advice and mistakenly believe that CFA credentials provide an adequate substitute for the broad-based management education provided by leading business schools.